Showing posts with label Year-to-date. Show all posts
Showing posts with label Year-to-date. Show all posts

Tuesday, June 17, 2014

General Fund Revenue Collections Declined by 20.7% in May – The Biggest One Month Decline in 13 Years

This image depicts the total tax revenue (not ...
This image depicts the total tax revenue (not adjusted for inflation) for the U.S. federal government from 1980 to 2009 compared to the amount of revenue coming from individual income taxes. The data comes from the Office of Management and Budget's record of the 'Budget of the US Government FY 2011', specifically the 'Historical Tables, Table 2.1.' The information is also here. (Photo credit: Wikipedia)
Significant Decline Occurred in Individual Income Tax Payments

RICHMOND- Governor McAuliffe announced today that general fund revenue collections decreased by 20.7 percent in May, with large declines in individual nonwithholding, the corporate income tax, and the tax on wills, suits, deeds, and contracts (recordation tax).  On a year-to-date basis, total revenue collections were down 1.6 percent through May, behind the annual forecast of 1.0 percent growth. 

Speaking about this news, Governor McAuliffe noted that “May is a significant month for general fund revenue collections since individual income tax returns for income earned in 2013 are due May 1.  A significant amount of May’s collections are also from upper income individuals where a significant portion of their income is based on capital gains.  It now appears that the uncertainty of federal tax policy resulting Fiscal Cliff in December 2012/January 2013 shifted more capital gains from 2013 into 2012 than expected, lowering the amount of capital gains that would otherwise be realized in 2013.  Accordingly, Virginia like many other states that have income taxes are now seeing declining revenues from capital gains.” 

As for other sources of revenue, collections of payroll withholding taxes fell 5.4 percent in May, due to one less deposit day compared with May 2013.  Corporate income tax collections decreased by  33.2 percent from last year.  Collections of sales and use taxes, reflecting April sales, fell 1.6 percent in May. Finally, recordation taxes from real estate transactions were down 27.3 percent as home sales and refinancing activity remained weak. 

On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 2.5 percent, behind the annual forecast of 2.9 percent growth.  Sales tax collections - 18 percent of General Fund revenues – have declined 4.5 percent through May, trailing the annual forecast calling for a 4.4 percent decline.  Adjusting for the accelerated sales tax program and the tax policy changes, included in last year’s transportation funding legislation, total revenues are down 0.6 percent through May, behind the adjusted forecast of 2.1 percent growth. 

Wednesday, May 21, 2014

General Fund Revenue Collections Increased 10.0% in April

English:
English: (Photo credit: Wikipedia)
Solid Gains Occurred in Net Individual Income Tax and the Insurance Premiums Tax


RICHMOND- Governor McAuliffe announced today that general fund revenue collections increased 10.0 percent in April, with solid gains in individual withholding and nonwithholding as well as in the insurance premiums tax.  On a year-to-date basis, total revenue collections were up 1.3 percent through April, slightly ahead of the annual forecast of 1.0 percent growth. 

“April is generally a significant month for revenue collections, said Governor McAuliffe. “The revenue data being released today represent a step in the right direction.”

May will be a critical month since individual income tax returns are due May 1.  In addition, a significant amount of May’s payments are from upper income individuals where a significant portion of their income is based on capital gains.  Recent news from states across the nation that have April 15th filing deadlines indicate some disappointing news about non-withholding collections as the uncertainty arising from the federal Fiscal Cliff tax policy negotiations in the  December 2012/January 2013 timeframe appears to have shifted more capital gains from 2013 into 2012 than otherwise would be the case.  As a result, we must be cautious and continue our efforts to place a priority on creating jobs and diversifying our economy. 

Collections of payroll withholding taxes grew 8.0 percent in April, due to an extra deposit day compared with April 2013.  A significant month for individual nonwithholding and corporate income tax collections, these sources increased respectively by 15.0 percent and 0.4 percent.  The first estimated payment from insurance companies for tax year 2014 was due in April.  The insurance premiums tax totaled $113.8 million and increased by 11.0 percent.  Collections of sales and use taxes, reflecting March sales, fell 5.0 percent in April.  Finally, recordation taxes from real estate transactions were down 19.9 percent as home sales remained weak. 

On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 3.3 percent, ahead of the annual forecast of 2.9 percent growth.  Sales tax collections - 18 percent of General Fund revenues – have declined 4.8 percent through April, trailing the annual forecast calling for a 4.4 percent decline.  Adjusting for the accelerated sales tax program and the 0.125 percent sales tax transfer required by the provisions of HB 2313, total revenues grew 2.2 percent through April, slightly ahead of the adjusted forecast of 2.1 percent growth. 
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Friday, February 14, 2014

Governor Announces Mid-Session Revenue Reduction of $140 Million

Terry McAuliffe
Terry McAuliffe (Photo credit: mou-ikkai)
Governor Announces Mid-Session Revenue Reduction of $140 Million
Due to Weak January and Year-To-Date Revenue Collections;
Offers Budget Actions to Cover Reduced Revenue Growth

RICHMOND- Today, Governor Terry McAuliffe briefed House and Senate budget committee leaders on the preliminary mid-session revenue reforecast numbers. This review involves an analysis of two elements: updated economic information and actual revenue collections for the first seven months of the current fiscal year, which started July 1, 2013. The Governor offered several budget solutions to cover the reduced revenue growth that was projected.

“Although our underlying economic forecast has not changed, it is clear that the current revenue receipts warrant caution,” said Governor McAuliffe. “In order to remain prudent, we must adjust our revenue estimates downward, which will help reduce future risks. After consulting with my economic team, it is my recommendation that we reduce the general fund revenue estimates for fiscal year 2014 by $125 million and the general fund revenue estimate for fiscal year 2015 by $15 million.” 

Total general fund revenue collections fell 5.9 percent in January with declines in all major sources except corporate income taxOn a year-to-date basis, total revenue collections fell 0.5 percent through January, lagging the annual forecast of 1.7 percent growth.  Total revenues are tracking behind the forecast due to declines in individual withholding, and non-withholding, and recordation taxes. In January, receipts for individual non-withholding declined by 25.3 percent and withholding (the State’s largest general fund revenue source) declined by 1.9 percent.  Recordation tax collections declined by 33.3 percent in January. 

These results are important as January is a significant month for revenue collections from individual estimated payments, sales taxes on December sales and corporate income taxes from large retailers. This combined with an analysis of the underlying economic fundamentals in the economy and revenue models forms the basis for the annual mid-session revenue reforecast presented to the 2014 General Assembly. Since December 16, the economic fundamentals on which the December forecast is based have not changed and continue to point to modest economic growth.

However, through January, fiscal-year-to-date revenue collections have declined by 0.5%  -- or 2.2% below the annual December estimate of a 1.7% increase.  The revenue sources that have underperformed the most have been individual non-withholding and the corporate income taxes  – both very volatile sources of revenue.  Given the performance to date in all sources, combined with the difficulty in forecasting individual non-withholding receipts in April and May, the Governor is recommending that the prudent step is to reduce the December forecast by $125.0 million in FY 2014 and $15.0 million in FY 2015.  General fund revenues are now expected to increase 1.0 percent in FY 2014 as compared to the 1.7 percent increase in the December forecast.

Given the timing of this mid-session reforecast, which occurs just in advance of the House and Senate money committees reporting out their respective versions of the budget on Sunday, the Governor further offered select budgetary actions to address the change in revenues. 

“It is my sincere hope that these budget actions will help the House and Senate in their respective budget deliberations in light of the timing of the lower revenue forecast I am recommending today,” said Governor McAuliffe.

There were eight budget adjustments that Governor McAuliffe proposed to address the lower revenue projections (see attachment).  None of these adjustments impact core services or entitlements. 

These adjustments include:

o   The elimination of the FY 2016 estimated payment to the revenue stabilization fund,
o   Use of additional Lottery revenues,
o   Capturing uncommitted balances across the budget, and
o   Reducing the unappropriated balance from $51 million to $11 million. 

BACKGROUND

The FY 2016 payment into the revenue stabilization fund is based upon revenue growth in FY 2014. Since the majority of the revenue decline, $125 million, is applied to FY 2014, the entire required deposit of $59.9 million in FY 2016 is eliminated and no longer needed.

While general fund revenues are being adjusted downward in FY 2014, Lottery revenues are expected to exceed the previous forecast by $15.5 million.  The Chairman of the Lottery Board notified the Governor in writing this week that due to low prize payouts and significant sales through the first half of the fiscal year, largely associated with a very high Mega-millions jackpot, the net proceeds available for public education are projected to increase by $15.5 million. This additional Lottery revenue can be used to offset general fund expenses in public education with no reduction in services.

In addition to the excess lottery balances, the Governor has also identified balances in the Literary Fund that may be used to offset general fund teacher retirement costs, balances from unclaimed accounts previously held by a former state agency that may now be deposited to the general fund, and appropriation balances in other programs that are not going to be needed. 

The other program balances that will not be needed and whose appropriations can now be reverted or deposited to the general fund including the Federal Action Contingency Trust (FACT) fund, some economic development fund balances, and some pilot education program balances.

Finally, the remainder of the gap will be closed by reducing the unappropriated balance by approximately $40 million, from $51 million as it was in the introduced budget to $11 million.  The large unappropriated balance was intended to offset potential revenue losses so this adjustment is in line with its intended purpose.


January 2014 revenue data, State of Virginia from Chuck Thompson

The above PDF's are the attachments that were included with the original source of the story at the Governor's office.
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Wednesday, January 15, 2014

Virginia Posts 0.8% Revenue Increase in December

English: The state seal of Virginia. Српски / ...
 (Photo credit: Wikipedia)
RICHMOND - Governor Bob McDonnell announced today that December 2013 revenue collections increased by 0.8 percent from December of 2012. On a year-to-date basis, total revenue collections rose 0.7 percent through December, lagging the annual forecast of 1.7 percent growth. Adjusting for the accelerated sales tax program and the 0.125 percent sales tax transfer required by last session's historic transportation bill, total revenues grew 1.7 percent through December, trailing the adjusted forecast of 2.9 percent growth.

The increase in December revenue was driven by solid growth in collections of individual withholding and nonwitholding partially offset by an increase in refunds and declines in sales, corporate income tax, and recordation taxes.  Individual withholding rose 3.1 percent. Year-to-date collections of individual nonwithholding through the first half of the fiscal year rose by 12.4 percent, well ahead of the annual estimate of a 6.3 percent increase.  At the same time, sales and use taxes, reflecting sales made in November, fell 4.3 percent in December.

Because a number of factors can influence the flow of payments and monthly growth rates this time of year, December and January receipts must be considered together to get a clear picture of revenue growth.

Speaking about the December numbers, Governor McDonnell noted, “Over the last four years we have both projected revenue growth and budgeted conservatively.  In doing so, we have helped put Virginia in a more sound financial position for the future.  Virginia’s economy continues to improve.  Over the last four years we have worked in a bipartisan fashion to put in place policies that strengthen that give our private sector job-creators the tools they need to create jobs and opportunities for all Virginians.  This approach has worked.  Since the beginning of this Administration 177,300 net new jobs have been created.  And, our unemployment rate has fallen two full percentage points, from 7.4% to 5.4%.  I want to commend the great work of Virginia’s first chief jobs creation officer, Lieutenant Governor Bill Bolling, and the members of the General Assembly for putting in place pro-growth policies that have helped the Commonwealth emerge as an economic leader during tough fiscal times.”

The December revenue numbers are available at this link:http://www.finance.virginia.gov/KeyDocuments/RevenueReports/MasterReportsList.cfm
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